Inside the Star

Mining firm NSR sues province of Ontario for $110 million

A Sudbury mining firm is suing the province for $110 million for failing to discharge its “constitutional duty” to engage First Nations on its behalf, which resulted losing the right to explore a vast area of northwestern Ontario.

In an email statement to the Star, Minister of Northern Development and Mines Michael Gravelle told the Star: "My understanding is that ministry staff have made efforts over the past year to engage with both the company and the First Nation, and have offered to facilitate discussions between them."

A Sudbury mining firm is suing the province for $110 million for failing to discharge its “constitutional duty” to engage First Nations on its behalf, which resulted in losing the right to explore a vast area of northwestern Ontario.

In its statement of claim, which was filed with the Ontario Superior Court of Justice Thursday, North Superior Resources Inc. said the Ontario government “took no substantive steps” to engage First Nations, “nor did it advise NSR it would not be taking any such steps.

“NSR’s rights to explore . . . have been frustrated,” it added.

The company’s claims have not been proved in court.

“My understanding is that ministry staff have made efforts over the past year to engage with both the company and the First Nation, and have offered to facilitate discussions between them,” Michael Gravelle, minister of northern development and mines, told the Star in an email statement.

“As the matter is now before the courts, it would be inappropriate for me to comment further.”

NSR is seeking damages for lost potential income after being kicked off Sachigo Lake First Nations (SLFN) land when, according to the claim, bands officials demanded $2.4 million, which the company refused to pay. The junior mining company has been operating in Ontario and Quebec for 12 years.

“In 2011, SLFN, began to make demands which were not only unreasonable but incapable of being met by NSR as a responsible corporation and public company,” said the statement of claim, which noted that the band made the expulsion official on June 26, 2012.

Tom Morris, president and CEO for NSR, told the Star “the long and short of it is that we were told if we didn’t pay a 24 per cent administration fee on a $10 million exploration program to the natives we would never be welcome back.”

In an interview, Alvin Beardy, chief of the Sachigo Lake First Nation, disputed any such demand, and suggested people in his community are still wondering why the company stopped exploration on its three land claims near the Manitoba border where it was testing for diamond and gold deposits.

“They are an excellent company. We are still scratching our heads over what happened here. We are still waiting for them to respond as to when they are coming up again,” said Beardy.

It is not the first time the government has faced this kind of legal action.

As result of a similar dispute, Ontario agreed last year to pay Toronto-based junior mineral exploration company God’s Lake Resources $3.5 million for abandoning a project near the Kitchenuhmaykoosib Inninuwug First Nation, north of Red Lake.